Finding Text
Criteria: 2 CFR 200.303 of the Uniform Guidance requires recipients of Federal funds to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the recipient complies with Federal statutes, regulations and the terms of the Federal award. Condition and Context: For the year ended June 30, 2022, the Theatre failed to maintain adequate segregation of duties within the accounting function. We consider segregation of duties to be an integral part of effective internal controls, and consider this deficiency to rise to the level of significant deficiency. Cause: The Theatre lacks a sufficient number of accounting personnel to properly segregate accounting duties, particularly within the cash receipts and cash disbursements transaction cycles. Effect or Potential Effect: Inadequate segregation of duties within the accounting function creates an environment more susceptible to fraud, and also increases the likelihood of human error in the processing of transactions as there are fewer reviews of transactional data. Recommendation: We recommend that the Theatre continue to consider the possibility of adding an additional employee within the accounting function, or assign enough accounting duties to an existing employee in another area of the organization to achieve adequate segregation of duties within the accounting function.